Jefferies cuts BASF on chemical oversupply and deteriorating spreads
Jefferies downgraded BASF to 'underperform,' forecasting 2027 EBITDA of €7.4B, 5% below consensus, citing weak chemical spreads and oversupply. It set a €44 price target, noting higher European gas prices and earnings headwinds. BASF's acquisition bid for Evonik was also discussed, with Jefferies suggesting an offer above €26/share would be dilutive. BASF reports Q4 results on Feb. 26, with 2027 EBITDA guidance as the focus.
How this was made
The 30-second read
Why it matters
The downgrade and lower guidance could trigger sell‑offs, especially in Europe‑focused portfolios.
Market read
Analyst downgrade of a large‑cap European chemical producer with new guidance.
What to watch
Potential upside from EU trade‑defence measures or a stronger-than‑expected agricultural unit performance.
Background
Jefferies downgraded BASF amid expectations of persistent chemical oversupply, weak spreads, and elevated European gas prices.
Ticker impact
Jefferies cut BASF to underperform, set a €44 price target and forecast 2027 EBITDA €7.4 bn, 5% below consensus.
likely pressure as the market prices in weaker spreads and higher feedstock costs
The downgrade is a fresh primary disclosure with a concrete target price and guidance gap, which typically moves the share.
Market effects
Chemical sector may face broader pressure from oversupply and high gas prices.
European chemicals stocks could see similar downside.
Limited to chemicals and related commodity exposure.
Counterpoint
If BASF can successfully execute cost‑cutting and CoreShift initiatives, the stock may be undervalued at €44.
Key entities
- CompanyBASF SE
German chemicals giant, subject of the analyst downgrade.
- BrokerageJefferies
Issued the downgrade and price target.
